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Self-Employed And Wanting To Buy A Flower Mound Home?

Buy A Flower Mound Home

For those who are self-employed and wanting to buy a Flower Mound home, getting a mortgage can be a bit tougher than for those who work for an employer. The biggest reason for this is that self-employed borrowers often report a lower credit score, often below 680. While it’s true that self-employed individuals generally make more money, there are a few key factors you should focus on when trying to get a home loan.

As reputable Flower Mound real estate agents, we want to share these factors with you so that you have a better chance of being approved for a loan.

Credit score. We already mentioned this, but it’s still a factor. Credit scores above 700 are best, and the rate you get will be affected by how high or low your score is.

Property type. For lenders, single family homes pose the least risk. Condos and multi-unit properties are risky for lenders because of factors such as the financial health of homeowners associations, whether multi-unit properties will fill up, etc.

Occupancy. If you are wanting a mortgage for your primary residence, the lender assumes less risk. Rental properties and second homes are bigger risk for lenders, so keep this in mind.

Loan amount. Loans of more than $417,000 are frequently kept on the bank’s balance sheet, while those below this amount are usually sold to Fannie Mae and Freddie Mac. This means that because loan factors must fit FMFM parameters, lenders are generally less likely to make a big exception on this type of loan.

DTI, or debt-to-income ratio. Lenders calculate your debt-to-income ratio by using your most recent business and personal tax returns along with year-to-date expenses and income to determine your average net income. While DTI can be as high as 43%, a lower number can be a factor in getting exceptions in other areas. Be sure to work with a loan officer who’s skilled in analyzing your business financial statements and tax returns.

Loan-to-value ratio. In regards to the value of the home you want to purchase, how much of a loan are you requesting? The loan-to-value ratio is a percentage relevant to the home’s value. A low ratio is important, which means you will need a larger down payment on the home if you need exceptions in other areas.

While it seems unusual that those who are self-employed often have a more difficult time getting a mortgage considering the fact that most make about 80% more income than other borrowers, it is a fact according to studies performed by Zillow. Hopefully the information above will help you get your loan approved!

At Team Nelson, our Flower Mound realtors are dedicated to helping you buy the home of your dreams, whether you’re self-employed or work for an employer. Give us a call today for more tips and guidance!

What People Are Saying

  • I have bought and sold twice with team Nelson and am continuously impressed with their service, knowledge and personable approach. I appreciate the experience they bring and value they give to me as a seller and a buyer! I wouldn’t use anyone other than team Nelson! Thank you!

    cgebhart79 Avatar

    Yet another great experience with Team Nelson is in the books! I've used them now three times, and would definitely recommend them to anyone. As far as I know, there are still no other realtors out there will to "sell your home free" and still give you the great level of service that you'd expect out of a realtor. Thanks again, guys!!

    Kevin Rollins Avatar
    Kevin Rollins

    Super easy transactions thru the Nelson Team in all phases of selling/buying a home. Love their expertise!Eugene & Jewel Cobb

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    Eugene Cobb
  • I would like to take this opportunity to express my appreciation for Team Nelson on their professionalism and quality-oriented work ethics; both are of the highest standard. During the process of buying a home I dealt with several Team Nelson members, though had the most interaction with Kevin E., and they never faltered in the level of professionalism and constant communication. Kevin showed a level of commitment and service that is sought after in any field. Though I am not a real estate expert I have purchased and sold other properties and genuinely appreciate their expertise. I would certainly recommend Team Nelson to anyone.

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    Wyatt L.

    Listen, here's the deal......we are now in our 5th house in the 8 years we have lived in DFW and Team Nelson has handled the buying and/or selling of all of them. I don't know a better endorsement than using someone over and over and over and over and over. Bill's team is super-responsive and...

    utxrwilson3 Avatar

    The Bill Nelson team really helped us find the perfect home. He was particularly good at understanding what we wanted and working to get it for us. I can easily recommend his team.

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    ryan elmer
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